Coldwell Banker Bain Luxury Market Review - Fall 2016

L U X U R Y M A R K E T R E V I E W FA L L 2 0 1 6

COLDWELL BANKER BAIN

LUXURY MARKET REVIEW

A LOOK INTO LUXURY Luxury real estate trends through Q3 2016

The luxury real estate market in Western Washington has experienced robust growth throughout 2016. Despite a summer slowdown owing to a variety of non-local factors, including Brexit-influenced stock market fluctuations and election-year consumer caution, our upper-end housing market has seen strong year-over-year growth. Through September, sales of homes priced $2M or higher rose dramatically over last year, with a 39% increase in units sold and a 45% increase in sales volume. The average market time for a luxury property decreased by 19%, further proof of the luxury segment's strength. As a sizzling spring followed a busy winter, luxury buyers competed hard for limited inventory, rapidly absorbing any listings left over from the tail end of last year and pushing up prices on the new listings that came to market. With the number of available single family homes at record lows, luxury condominium sales saw tremendous growth. Year to date, the number of condos sold between $1M and $2M has increased by 42% over last year, while the number of condos sold above $2M has shot up 131%. And sales of waterfront homes priced $2M+ have continued their track record of consistent growth, with a 22% increase in 2016 sales volume (to $453 million) and a 15% increase in units sold. Please reference the last pages of this report for luxury waterfront statistics.

Balancing the market for sustained and sustainable growth.

This year’s luxury real estate market in our region will be defined by sustainable growth. Most areas have experienced a healthy increase in the number of homes sold above $2M, even as average sold prices haven’t soared beyond reason.

At the same time, the segment of homes sold above $5M has performed well in 2016, with unit sales up 27% and sales volume up 26% over the first three quarters of 2015. This is good news in light of this year's economic and political uncertainties, which may disproportionately influence the spending behavior of affluent consumers. And it’s great news given that the second and third quarters saw a drop in the amount of offshore cash coming into our local housing market.

Even if the previous flow of Chinese investment capital becomes just a drip, our region’s luxury properties will remain attractive to high-net-worth locals and to executives relocating here from Silicon Valley and other, more expensive markets.

With Western Washington companies thriving – in tech, biotech, medicine, venture capital, legal services and telecom – wealth and wealth creation in our region are at historic highs. The luxury housing market is poised to continue its solid growth for the foreseeable future. The main question is whether there will be enough inventory to meet the ongoing demand. Luxury home builders – crucial to the creation of needed new inventory – should continue to thrive. New construction luxury home sales have performed well so far in 2016, with year-to-date unit sales up 40% and total sales volume up 43% over 2015.

These trends are expected to continue through the remainder of 2016 as wealthy buyers seek out and invest in lifestyle properties around our region.

LUXURY MARKET REVIEW

400

554

65

91

16

37

339

444

TOTAL LUXURY SALES | YTD 2016 VS. 2015

SINGLE FAMILY HOMES

CONDOMINIUMS

NEW CONSTRUCTION HOMES

ALL PROPERTY TYPES

31%

131%

40%

39%

All categories of luxury homes have experienced comfortable sales growth so far this year. These charts reflect data from the Northwest Multiple Listing Service for homes sold at or above $2,000,000.

Year-to-date, luxury condominium sales have made the largest leap, nearly tripling in sales volume.

Sales of single family homes in the $2M+ price category have jumped 30%, to almost $1.3B in total volume. And, with nearly 500 luxury properties sold through the end of the third quarter, 2016 has already set a record for the most $2M+ homes sold in a single year.

$2,920,400

$3,052,000

$2,691,800

$2,750,300

$2,301,800

$2,761,800

$2,929,200

$2,906,700

AVERAGE LUXURY HOME PRICE | YTD 2016 VS. 2015

SINGLE FAMILY HOMES

CONDOMINIUMS

NEW CONSTRUCTION HOMES

ALL PROPERTY TYPES

-1%

20%

2%

5%

Based on information from the Northwest Multiple Listing Service, data reflects sales of properties sold for $2,000,000 or higher.

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$1,168,166,000

$1,690,796,000

$175M

$250M

$37M

$102M

$992,991,000

$1,290,556,000

TOTAL LUXURY SALES VOLUME | YTD 2016 VS. 2015

SINGLE FAMILY HOMES

CONDOMINIUMS

NEW CONSTRUCTION HOMES

ALL PROPERTY TYPES

30%

177%

43%

45%

This year's robust growth in luxury home sales, reflected in both units sold and dollar volume, has been tempered by relatively flat price trends for single family and new construction homes.

Condominiums have been a different story so far in 2016, with average sold prices up 20% over 2015. The unusually high demand for condos can be explained by multiple factors, including the head-on collision between low inventory (due to a lack of new condo projects) and a spike in downsizing boomers and foreign investors looking to buy in our region's downtown cores.

74 Days

60 Days

66 Days

57 Days

87 Days

46 Days

70 Days

59 Days

AVERAGE DAYS ON MARKET | YTD 2016 VS. 2015

SINGLE FAMILY HOMES

CONDOMINIUMS

NEW CONSTRUCTION HOMES

ALL PROPERTY TYPES

-15%

-47%

-14%

-19%

YTD sales data compiled by Coldwell Banker Bain through September 2016; Northwest Multiple Listing Service does not guarantee its accuracy.

LUXURY MARKET REVIEW

SEAT T L E YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $294 MILLION | $227 MILLION | 29.7% TOTAL HOMES SOLD 106 | 83 | 27.7% AVG. SALES PRICE $2,773,800 | $2,730,900 |1.6% AVG. DAYS ON MARKET 61 | 72 | -15.3% SOLD/LIST PRICE % 98.7% | 98.4% | 0.3% Based on information from the Northwest Multiple Listing Service, data reflects sales of Single Family Homes sold for $2,000,000 or higher.

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EA S T S ID E YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $881 MILLION | $710 MILLION | 23.9% TOTAL HOMES SOLD 299 | 234 | 27.8% AVG. SALES PRICE $2,945,000 | $3,036,200 | -3.0% AVG. DAYS ON MARKET 47 | 61 | -23.0% SOLD/LIST PRICE % 97.2% | 96.4% | 0.8% YTD sales data compiled by Coldwell Banker Bain through September 2016; Northwest Multiple Listing Service does not guarantee its accuracy.

LUXURY MARKET REVIEW

BEL L EVU E EAS T/S OU TH Bridle Trails | Glendale | Lakemont Newport Shores | Somerset | The Summit YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $59.1M | $93.2M | -36.6% TOTAL HOMES SOLD 20 | 31 | -35.5% AVG. SALES PRICE $2,955,300 | $3,007,700 | -1.7% AVG. DAYS ON MARKET 63 | 35 | 80.0% SOLD/LIST PRICE % 98.3% | 96.4% | 2.0%

C E N T R A L S E AT T LE Broadmoor | Capitol Hill | Denny Blaine | Madrona Madison Park | Montlake | Washington Park YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $133M | $96.4M | 38.0% TOTAL HOMES SOLD 49 | 37 | 32.4% AVG. SALES PRICE $2,713,600 | $2,605,000 | 4.2% AVG. DAYS ON MARKET 45 | 63 | -28.6% SOLD/LIST PRICE % 99.0% | 99.2% | -0.2%

Based on information from the Northwest Multiple Listing Service, data reflects sales of Single Family Homes sold for $2,000,000 or higher.

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C LY D E H IL L & W E ST B E LLE V U E Beaux Arts | Downtown Bellevue | Enatai Hunts Point | Vuecrest | Yarrow Point YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $389M | $288M | 34.7% TOTAL HOMES SOLD 132 | 89 | 48.3% AVG. SALES PRICE $2,947,800 | $3,245,000 | -9.2% AVG. DAYS ON MARKET 51 | 61 | -16.4% SOLD/LIST PRICE % 97.4% | 97.3% | 0.1%

D OWNTOWN S EATTL E , MAG NOL I A & QU EEN A N N E Belltown | Lake Union | Magnolia Queen Anne | South Lake Union YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $69.1M | $60.5M | 14.3% TOTAL HOMES SOLD 28 | 22 | 27.3% AVG. SALES PRICE $2,469,500 | $2,749,000 | -10.2% AVG. DAYS ON MARKET 54 | 96 | -43.8% SOLD/LIST PRICE % 99.5% | 97.1% | 2.5%

YTD sales data compiled by Coldwell Banker Bain through September 2016; Northwest Multiple Listing Service does not guarantee its accuracy.

LUXURY MARKET REVIEW

I S S AQUAH & S AMMAMISH Aldarra | Beaver Lake | East Lake Sammamish Issaquah Highlands| Pine Lake | Windsor Greens YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $50.0M | $37.9M | 32.0% TOTAL HOMES SOLD 17 | 15 | 13.3% AVG. SALES PRICE $2,943,300 | $2,527,100 | 16.5% AVG. DAYS ON MARKET 32 | 70 | -54.3% SOLD/LIST PRICE % 97.9% | 95.0% | 3.1%

K I R K LA N D Carillon Point | Downtown | East of Market Holmes Point | Houghton | West of Market YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $96.6M | $57.6M | 67.8% TOTAL HOMES SOLD 37 | 24 | 54.2% AVG. SALES PRICE $2,610,100 | $2,398,100 | 8.8% AVG. DAYS ON MARKET 33 | 44 | -25.0% SOLD/LIST PRICE % 97.0% | 96.6% | 0.4%

Based on information from the Northwest Multiple Listing Service, data reflects sales of Single Family Homes sold for $2,000,000 or higher.

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ME D I N A YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $84.8M | $70.9M | 19.5% TOTAL HOMES SOLD 24 | 22 | 9.1% AVG. SALES PRICE $3,532,900 | $3,224,000 | 9.6% AVG. DAYS ON MARKET 21 | 62 | -66.1% SOLD/LIST PRICE % 98.2% | 96.9% | 1.3%

MERC ER I S L AND YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $145M | $140M | 3.6% TOTAL HOMES SOLD 46 | 43 | 7.0% AVG. SALES PRICE $3,146,100 | $3,260,500 | -3.5% AVG. DAYS ON MARKET 63 | 82 | -23.2% SOLD/LIST PRICE % 95.4% | 94.5% | 1.0%

YTD sales data compiled by Coldwell Banker Bain through September 2016; Northwest Multiple Listing Service does not guarantee its accuracy.

LUXURY MARKET REVIEW

NORTH WES T S EATTL E Broadview | Green Lake | Innis Arden | North Beach Phinney Ridge | The Highlands | Wallingford YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $4.4M | $20.3M | -78.3% TOTAL HOMES SOLD 2 | 7 | -71.4% AVG. SALES PRICE $2,200,000 | $2,903,000 | -24.2% AVG. DAYS ON MARKET 7 | 117 | -94.0% SOLD/LIST PRICE % 100.0% | 92.3% | 8.3%

N O RT HE A ST SE AT T LE Bryant | Hawthorne Hills | Inverness | Laurelhurst | Ravenna View Ridge | Windermere YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $52.3M | $39.4M | 32.7% TOTAL HOMES SOLD 15 | 13 | 15.4% AVG. SALES PRICE $3,483,300 | $3,029,300 | 15.0% AVG. DAYS ON MARKET 143 | 26 | 450.0% SOLD/LIST PRICE % 97.7% | 101.3% | -3.6%

Based on information from the Northwest Multiple Listing Service, data reflects sales of Single Family Homes sold for $2,000,000 or higher.

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RE D M O N D & W O O D I N V I LLE Bear Creek | Blakely Woods | Hollywood Hill Lake of the Woods | Novelty Hill | Union Hill YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $30.9M | $10.9M | 184.1% TOTAL HOMES SOLD 12 | 5 | 140.0% AVG. SALES PRICE $2,573,300 | $2,174,000 | 18.4% AVG. DAYS ON MARKET 54 | 58 | -6.9% SOLD/LIST PRICE % 96.1% | 97.6% | -1.5%

S OU TH & WES T S EATTLE Alki | Beach Drive | Fauntleroy | Leschi North Admiral | Mt. Baker | Seward Park YTD 2016 | YTD 2015 | % CHANGE TOTAL SALES VOLUME $5.3M | $16.1M | 118.4% TOTAL HOMES SOLD 12 | 6 | 100.0% AVG. SALES PRICE $2,938,100 | $2,690,800 | 9.2% AVG. DAYS ON MARKET 54 | 112 | -51.8% SOLD/LIST PRICE % 96.9% | 94.8% | 2.2%

YTD sales data compiled by Coldwell Banker Bain through September 2016; Northwest Multiple Listing Service does not guarantee its accuracy.

LUXURY MARKET REVIEW

Life at the Water's Edge Living on the water has always been the ultimate goal of the affluent Western Washington home buyer. Whether dockside on the glacier-fed waters of Lake Washington and Lake Sammamish or astride the saltwater shores of Puget Sound, waterfront homeowners experience the pinnacle of luxury living. One reason they make up an exclusive group is the relative scarcity of waterfront homes for sale. Representing only about 20% of all luxury real estate in our region, waterfront is the most glamorous and scrutinized market segment. With little inventory to choose from at any given time, and with the best-situated homes exchanging hands far less often than the norm, waterfront buyers face unique circumstances. They must be willing to pay more, be more patient, and strike fast and assertively when their coveted property comes to market.

So far this year, luxury waterfront sales in the Northwest Multiple Listing Service have fared well compared to the first three quarters of 2015. The market has seen a 15% increase in waterfront units sold, a 22% growth in sales volume (to almost half a billion dollars) and a 6% uptick in average sales price ($3.6M). The chart to the right details year-to-date sales trends for luxury waterfront properties in various communities along the shores of Lake Washington, Lake Sammamish, Lake Union/Portage Bay, and the Puget Sound.

PUGET SOUND

LAKE SAMMAMISH

LAKE WASHINGTON

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C L O S E D S A L E S ($2M + )

A V E R A G E S A L E S P R I C E ($2M + )

CITY

YTD 2016

YTD 2015

% CHG

YTD 2016

YTD 2015

% CHG

Mercer Island

19

17

11.8%

$3,926,794

$4,289,000

-8.4%

Kirkland

12

8

50.0%

$3,102,065

$2,433,125

27.5%

Bellevue

10

17

-41.2%

$3,995,600

$4,360,529

-8.4%

Seattle

8

7

14.3%

$5,327,813

$3,910,714

36.2%

Hunts Point

4

3

33.3%

$5,504,500

$7,030,000

-21.7%

Yarrow Point

4

2

100.0%

$4,250,000

$6,367,500

-33.3%

Medina

3

2

50.0%

$6,100,183

$4,346,500

40.3%

Kenmore

1

0

-

$2,364,950

-

-

Lake Forest Park

1

2

-50.0%

$2,450,000

$2,888,000

-15.2%

Sammamish

7

4

75.0%

$3,015,357

$2,462,250

22.5%

Redmond

3

1

200.0%

$2,766,667

$2,200,000

25.8%

Bellevue

3

7

-57.1%

$2,261,667

$2,552,857

-11.4%

Issaquah

2

2

0.0%

$2,673,500

$2,530,000

5.7%

Bainbridge Island

4

6

-33.3%

$4,082,139

$2,505,167

62.9%

San Juan Islands

4

5

-20.0%

$2,587,500

$2,307,000

12.2%

Seattle

2

2

0.0%

$2,162,500

$2,870,000

-24.7%

Normandy Park

2

0

-

$2,437,500

-

-

Gig Harbor

1

1

0.0%

$2,000,000

$2,340,000

-14.5%

Whidbey Island

1

0

-

$5,100,000

-

-

Woodway

1

0

-

$8,000,000

-

-

Lake Union / Portage Bay

2

3

-33.3%

$2,375,000

$2,621,667

-9.4%

Based on information from the Northwest Multiple Listing Service, data reflects $2M+ sales of waterfront single family homes between Jan. 1 and Sept. 30.

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